Acting on the International Monetary Fund’s (IMF) demand, the Sindh cabinet on Monday approved the Agriculture Income Tax Bill 2025.
The decision was taken in a meeting of the provincial cabinet chaired by Sindh CM Murad Ali Shah.
The Agriculture Income Tax Bill has been enforced from January 2025.
Sindh CM Murad Ali Shah announced that the provincial government has decided not to include livestock under the agriculture income tax. According to the bill, Sindh Revenue Board (SRB) will be responsible for tax collection.
The bill states that in the event of natural disasters, adjustments will be made to the agriculture income tax.
Furthermore, a penalty will be imposed on individuals who attempt to conceal cultivated land.
Under the new tax structure, small companies will be subjected to a 20% tax, while large companies will be taxed at 28%.
Agricultural income up to Rs150 million will be exempt from taxation, whereas income exceeding this threshold will be taxed progressively, starting at 1% for earnings between Rs150 million and Rs200 million, and reaching 10% for income above Rs500 million.
During the cabinet meeting, concerns were raised that the imposition of the agriculture income tax could lead to an increase in vegetable prices, as well as higher costs for essential grains such as wheat and rice.
Sindh CM Murad Ali Shah emphasized that Sindh should have been consulted before the federal government engaged in discussions with the International Monetary Fund (IMF) on taxation matters. However, he affirmed that the decision to impose the tax was made in the broader national interest.
